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Privatization at Gunpoint

Aasim Sajjad Akhtar is a political activist associated with the People’s Rights Movement (PRM), a confederation of working-class struggles. He also teaches colonial history and political economy at the Lahore University of Management Sciences.

The transfer of assets from peripheral states to international financial oligarchies is one of the defining tenets of the neoliberal counter-revolution. As a general rule, this latest form of neocolonial transfer of surplus to the industrialized core has proceeded relatively successfully in many peripheral states, with many Latin American states standing out as significant exceptions. In Pakistan, where the ruling state oligarchy has historically been the equivalent of a comprador bourgeoisie, this process has accelerated since it was initiated in the late 1980s.

Most of the 160-odd privatizations that have taken place over the past fifteen years have seen the state handing over control of mills, factories, and other relatively small-scale manufacturing units largely to local buyers. An astounding 130 such enterprises have since collapsed, leaving hundreds of thousands of workers in the lurch. Even government economists acknowledge that only a handful of privatized enterprises have actually improved their economic performance. Meanwhile, the army—the most powerful political institution in the country—has also become the biggest corporate power in the land, with interests in sectors as diverse as real estate, aviation, transport, construction, and oil and gas exploration. Many army-run corporations are in the red, yet they continue to be patronized by the state and given exclusive contracts. This is only one of many glaring contradictions in the neoliberal experiment as practiced in Pakistan.

The Pakistani left has been extremely marginal since the privatization process began, having become progressively less and less influential amongst the organized working class since it reached its peak as a political force in the early 1970s. Private sector trade unions are almost nonexistent due to the severe fragmentation of production processes that has been the dominant feature of the manufacturing sector over the past two decades. Trade unions still exist in some shape or form in the public sector which includes the vast industrial powerhouses of railways, telecommunications, airlines, and public utilities such as water, electricity, and gas. Sadly, the vast majority of these public sector unions are severely co-opted by the state, a trend that can be traced back directly to the state’s efforts to dismember a militant and politicized trade union movement in the 1970s.

As a result, when the latest waves of privatizations began following the coup of October 1999 led by General Pervez Musharraf, it is likely that the state expected little in the way of resistance. Importantly, in the 1990s the international financial institutions increasingly pressured Pakistan to divest its more crucial assets, primarily because of poor economic performance and an accompanying decrease in the bargaining power of the state. Even so, the speed with which major state assets have been slated for privatization since October 1999 speaks volumes about the ideological commitment of the present government to neoliberal orthodoxy.

For the most part the suspicion that resistance to major privatizations would be insignificant has been confirmed, even though many enterprises on the chopping block provide subsidized services to the general public. In some cases, such as privatization of the Karachi Electricity Supply Corporation, a large number of politically conscious workers attempted to involve the general public in anti-privatization mobilizations. These mobilizations were relatively successful. Yet, given the lack of political will among the main trade unions (read: co-option by the state), the privatization process eventually went ahead without great difficulty.

Only three state-owned enterprises operate on a healthy annual profit—the Oil and Gas Development Corporation Limited, Pakistan State Oil, and the Pakistan Telecommunications Company Limited (PTCL). The two oil enterprises with obvious strategic importance to imperialist capital are up for sale, with little opposition from the unions and mainstream political parties. The PTCL has been slated for sale for over a decade but the process has never quite taken off primarily because previous governments, unlike the current military junta, were constrained by their nominal accountability to the working class. However, the telecommunications sector has been deregulated in recent years leading to a proliferation of first domestic and more recently international cellular phone providers. It is a part of the overall strategy in the sector to privatize the public monopoly, or what is effectively a natural monopoly.

It is not surprising that the telecommunications sector in Pakistan is a coveted target of multinational telecom companies. Pakistan’s potential consumer market of 150 million people is highly attractive particularly given the tremendous incentives being offered by a government ideologically committed to neoliberalism. In the absence of an organized mass movement to resist neoliberalism, the present military government is unencumbered by meaningful political opposition to its uninhibited commitment to privatization and other such policies.

Given the overall state of affairs, it is difficult to identify precise reasons why PTCL workers have taken a leading role in mobilizing against privatization, especially given that the labor movement as a whole has not put up any meaningful fight against the many other privatizations that have taken place during the tenure of this and previous governments. The most important factor must be that pockets of left workers have penetrated the rank and file within the PTCL and systematically struggled to build an anti-privatization current. Indeed no other major state enterprise that has been privatized in recent years has been witness to a similar mobilization of the left. In particular, in the case of the PTCL, leftist workers refrained from the typically sectarian attitudes that have ravaged the left in the past—left workers from different parties and groups have coordinated their efforts rather than blame one another for their failings.

Another important factor is the relative affluence of PTCL workers as compared to the majority of workers in state enterprises as well as in the private sector. Because of the PTCL’s consistently good performance, workers have experienced material advancement that most state employees have not. Meanwhile the situation in the private sector is dismal, with informalization rife and a corresponding decline in real wages, working conditions, and job security. Needless to say, organizing in such conditions is extremely difficult.

The mobilization of PTCL workers against privatization can actually be traced back to the formation of the Unions Action Committee (UAC)—an alliance of nine of the eleven unions operating within the PTCL—in March 2005. The alliance was formed to protest the death of a young PTCL worker due to negligence by the administration. Subsequently, the UAC almost immediately initiated a nationwide protest campaign against the utility’s proposed privatization, the initial bidding for which was originally planned at the end of May.

As with every major state enterprise, trade union leadership in the PTCL has a long history of co-option by the state. In this case too, in spite of the formation of the UAC, even left workers within the PTCL did not expect any major mobilization. Starting in early May, a series of token protests, demonstrations, and symbolic two-hour long strikes were organized. During this period, the government announced that the bidding date was being delayed until June 10. Clearly, it was believed that the wave of protests would peter out and the demands of workers could be contained through a co-opted union leadership (as has happened repeatedly in the past). In this regard, a benefits package of over three billion rupees (50 million dollars) had been prepared over the preceding few months that was due to workers independently of the privatization process. This package was now being used as bait to distract from the anti-privatization demand.

However, the pressure on the union leadership from below was maintained by activists through political education of workers in small corner meetings and through pamphlets, etc. Subsequently a series of large public meetings was arranged in all of the major urban centers of the country, starting with Lahore, and then followed by Quetta, Peshawar, and Karachi. The protests culminated in a large gathering of workers at PTCL headquarters in the capital, Islamabad on May 25, 2005. It is estimated that 12,000 workers were present at the meeting, a significant proportion of the PTCL’s total workforce of 62,000. Activists from around the country gathered at this final public meeting where the mood was very militant.

The state added fuel to the already considerable fire, attempting to prevent the meeting from taking place by locking out workers. However, the authorities eventually had to give in as confrontations took place between police and the locked out workers. With thousands of workers threatening to take to the streets, the gates of the PTCL headquarters were opened. By this time resentment was rife. Due to the conscious efforts of the active left cadre within the workers a one-point demand against privatization was articulated with workers suggesting they were even willing to forego the financial benefits package.

It is certain that the union leadership did not anticipate the dramatic tempo of the mobilization. Unprepared to resist it they were quickly overwhelmed by popular pressure and forced to announce an immediate country-wide strike, starting on May 26. The intent of the leadership can be ascertained from the fact that June 6 was set as the date when the entire communications infrastructure would forcibly be shut down, leaving a gap of eleven days between the beginning of the strike and its logical culmination. Sustaining a strike for eleven days is difficult in any context, let alone in Pakistan where the industrial working class is isolated, fragmented, and politically immature. Clearly the leadership did not expect the strike to last and hoped to squeeze out some concessions from the government that could be claimed as a victory for the workers. Such a scenario would suit the state as it could go ahead with its privatization plan having successfully extinguished the workers’ militancy.

However, the strike not only lasted but the workers’ anti-privatization sentiment intensified. The headquarters compound was totally taken over by the workers with large gatherings taking place on a daily basis after May 25. Mainstream opposition parties—none of whom are ideologically opposed to privatization—jumped on the bandwagon, decrying the privatization of the nation’s most profitable and strategic asset. Nonetheless, the shortcomings of the labor movement as a whole were also painfully obvious. None of the unions in the other major state enterprises mobilized meaningfully, offering only token statements of support. The major trade union federations, notorious for their acquiescence to the very first wave of privatizations in the late 1980s, struggled even to issue token statements. Yet, because of the unanimous strike within the PTCL and the great threat of a complete shut down of the communications infrastructure, the movement persisted. On June 4, after a series of marathon meetings between various government officials and the UAC leadership, a deal was brokered in which privatization was indefinitely postponed. Needless to say, the state feared the prospect of a shutdown on June 6. The union leadership genuinely would not have been able to prevent this from happening.

At the time, given the lack of preparation for the strike and the overall political environment, left activists within the movement believed that this was a great victory as it was a clear retreat by the government, and the first major instance of neoliberal orthodoxy being explicitly rejected by the working class. It was agreed that the impetus generated by this retreat could be used to mobilize more substantively in the future and also to put more effort into extending the movement beyond the PTCL, linking up not only with workers in other state-owned enterprises (in spite of union leaderships) but also with other active counter-hegemonic formations such as landless farming tenants and indigenous fishing communities.

As it turned out, within forty-eight hours of the strike being called off, neoliberal ideologues within the government along with the minister of information technology—the son of a former president and big landlord—started issuing statements that privatization would be completed by the end of the month. The statements even claimed that the union leadership had continued dialogue with government officials after calling off the strike and that it was satisfied with the government’s guarantees that all of the workers’ concerns over privatization would be dealt with.

Subsequently a bidding date of June 18 was announced, and the agreement of June 4 totally disregarded. A wave of arrests started following the formal announcement of the bidding date on June 11. Homes of union activists and their families all over the country were raided and anti-state criminal cases were lodged against them. The government managed to parade a handful of opportunist union leaders around who agreed to privatization of the enterprise so as to break the workers’ unity. However, the rank and file within PTCL remained steadfast. Unfortunately, the historic mobilization had not been accompanied by comparable action by political parties and other trade unions.

The regime demonstrated its insecurity and also its inherent tendency towards coercion when it deployed regular and paramilitary forces to all PTCL installations in the days leading up to the bidding. For all intents and purposes, PTCL offices and exchanges became no-go areas with roadblocks and police contingents commonplace. While this state action ostensibly marked a political victory for the PTCL workers, it also effectively limited their ability to gather and disrupt the process through direct physical mobilization, and thus undermined their ability to block privatization.

The majority of the PTCL’s 62,000 workers remain dead-set against privatization. However, manipulation of the press, and insufficient support for PTCL workers from other political and social forces, allowed the government to carry out bidding under high security on June 18. A United Arab Emirates firm, Etisalat, emerged victorious and was allowed ninety days to complete full payment for the utility. However, it is far from clear that the PTCL workers’ protest is over. The discontent amongst the rank and file remains palpable—and it is likely that after recuperating from the wave of repression another wave of protests will be mounted, even if after the takeover of the company by the successful bidders. It would appear that the co-opted union leadership has outlived its mandate and that a radicalized PTCL workforce will now demand more responsive leadership.

It cannot be reiterated enough that the history of the industrial working class in Pakistan since the late 1970s is a history of co-option and defeat after defeat. The neoliberal counterrevolution has successfully taken back many of the gains made by the working class after tumultuous struggles in the previous decades. In general the industrial working class is a shadow of the genuine political force it was some three decades ago. However, the mobilization of PTCL workers in the face of a regressive political environment, a union leadership prone to opportunism, and the pressure of a militarist state totally committed to neoliberalism, has clearly generated a great deal of excitement among the left and even the general public. As economic and social conditions worsen for the majority of working people, the struggle of PTCL workers is seen as being representative of the needs and wants of working people at large. Given the rapid informalization of labor in Pakistan (as in much of the periphery) the revival of the organized labor force can potentially have a major impact on the very difficult task of organizing informal sector labor. While it remains to be seen in which direction the PTCL struggle goes from here, there can be no doubt that this struggle, if understood in its full complexity by progressive political forces, can provide major impetus to a larger politicized mobilization in the not too distant future.

It is especially important to recognize that working-class resistance against the state and/or imperialist capital has tremendous significance in terms of the underdeveloped bourgeois democratic project in the country. Given that the militarist state wields all effective political power and mainstream political parties remain weak, the establishment of a mere formal democratic process remains the major political goal of liberal and left forces.

That being said, liberals—whether represented by political and social organizations or by the intelligentsia—often have a myopic view of military rule that resembles the modernizers of the 1960s and 1970s. Among other things, many liberals concur with the military’s propaganda that politicians are corrupt and have never displayed the qualities necessary to run the country. This refrain totally overlooks the fact that the civil and military oligarchy has dominated the state since Pakistan’s creation and that mainstream politicians have always been co-opted by the state. The modernizers of previous decades similarly claimed that the military was best suited to spearhead the developmental state. All in all, this co-option of the liberals—among the most vocal and influential political constituencies—insulates the military from meaningful political opposition especially since more radical alternatives are conspicuous by their absence.

However, primarily because of the blatantly unpopular policies that have spanned the six years of the Musharraf dictatorship, there does seem to be a consensus developing across significant segments of society that military rule is inevitably bad in the long-run. In the absence of a meaningful challenge to the military from a largely co-opted leadership of mainstream parties, it is mass mobilizations that represent the major force for democratization.

As pointed out earlier the PTCL mobilization is in large part due to the efforts of leftist workers who have made great strides in raising the level of consciousness within the rank and file. However, it is important, too, that the left engage in self-criticism and consider when it will be able to regenerate itself as a distinct political force rather than continue to act in somewhat renegade fashion, trying to influence mass movements. If the left were to exist as an independent political force, there is little doubt that mass movements such as this one could be definitively influenced, politicized, and linked to other such movements all of which would ideally culminate in a genuine political challenge to the state. As suggested above, the state’s ability to force through the initial bidding process was entirely a result of inadequate support for the PTCL workers, who had maintained as much pressure as could be expected from them. It would be facile to expect that the mainstream bourgeois parties will offer anything more than token support to similar mobilizations in the future as they too remain proponents of neoliberalism. Meanwhile the trade union movement at large cannot be expected to take on a radical role until and unless the influence of the left within individual unions and the major federations increases.

A positive outcome of the entire PTCL mobilization is the formation of an Anti-Privatization Alliance in the three big political centers of the country, Karachi, Islamabad, and Lahore. As a broad coalition of fragmented left forces, the alliance holds out the hope of more meaningful collaboration in the future: one which may culminate in the coming together of left forces to create a nationwide political organization that can be effective in harnessing popular sentiment that is both anti-imperialist and broadly anti-neoliberal. There is little doubt that left forces in Pakistan recognize the need for a dramatic enhancement of the left’s political visibility and effectiveness. More than any other mobilization of the working class in Pakistan in recent times, the struggle of the PTCL unionists reminds us that workers have the potential to emerge as an irresistible force, turning the tide against neoliberalism and even against the military state—if they are sufficiently united and determined, if they are fully cognizant of the strategic terrain in which they are placed.